The History Of Bitcoin: When It All Started

“What is now proved was once only imagined,” says William Blake, and indeed, no one once could imagine to have a digital money. However, here we are with all the crypto and Bitcoins, which change the world daily for everyone.

But how did it all start? Let’s immerse ourselves in the history of the father of cryptocurrency – Bitcoin, and get to know in more detail what this crypto is all about.

What is Bitcoin, and how does it work?

Since its inception in 2009, Bitcoin (BTC) has been the most widely used and valued form of digital money worldwide. It is a digital currency built on the blockchain that doesn’t have a central authority or middleman. Instead, it is supported by a network of users who check and record transactions without needing a central authority or middleman.

Simply speaking, Bitcoin is a digital alternative to fiat money, like the U.S. dollar and other currencies, which are managed by governments and banks. An approach known as the proof-of-work agreement technique” is used to validate Bitcoin transactions that Bitcoin miners strive to validate.

Some Bitcoin devotees only see the cryptocurrency as a fun thing to trade and gamble with, while others think it might eventually replace fiat money as the standard of the online economy. There is no denying that Bitcoin has rapidly grown in popularity since its launch. Still, the initial 13 years have also brought to light some significant problems and deficiencies in the most well-known digital currency in the world.

When and how did Bitcoin emerge?

It’s no accident that Bitcoin was created amid one of the most turbulent financial periods in American history. During the 2007–2009 global financial crisis, there was a high level of mistrust of banks and centralized governments.

Someone or a group using the name Satoshi Nakamoto started Bitcoin in 2009. This name was used in the original Bitcoin white paper from 2008, which explained how the blockchain works.

Since then, many individuals have claimed to be Satoshi Nakamoto, but none of them have been able to back up their claims with enough proof.

The Bitcoin blockchain was formally inaugurated on January 3, 2009, when the first Bitcoin block, known as the “genesis block,” was produced. Satoshi allegedly mined up to 1.1 million Bitcoins seven months after Bitcoin’s inception. Those coins are now worth more than $22 billion. 

Pizza Day: first Bitcoin transaction

On May 22, 2010, a Florida man reportedly made the first Bitcoin transaction in the real world when he agreed to exchange 10,000 BTC for two Papa John’s pizzas worth roughly $25. In that transaction, one Bitcoin was worth around one-fourth of a penny. Since then, on this day (May 22), the Bitcoin community celebrates Pizza Day.

All about the price of Bitcoin

Online exchanges initially made it possible to purchase, sell, and trade Bitcoin in 2010. The first time that the price of Bitcoin went above $1 was in April 2011.

In 2011, Bitcoin also encountered its first rival in the cryptocurrency industry. In October 2011, Litecoin (LTC) was introduced. Later, in 2015, the Ethereum blockchain became operational.

Bitcoin’s visibility, appeal, and volatility all increased along with the currency’s price. The cost of one Bitcoin topped $1,000 by November 2013. With prices initially reaching $10,000 per coin in November 2017 and about $20,000 in December 2017, Bitcoin prices and trade volumes began to soar in late 2017.

Bitcoin boom

The next significant surge in Bitcoin popularity occurred in late 2020 amid the COVID-19 epidemic. Long-term closures of entertainment and leisure companies like sports and casinos left a lot of people with more money and time on their hands, which led to another boom in the value of Bitcoin in late 2020.

In December 2020, Bitcoin reached new all-time highs of over $20,000. Later, in November 2021, it reached a peak of $68,990.

Unfortunately, consistently high inflation forced the Fed to tighten monetary policy in early 2022, prompting significant sell-offs in cryptocurrencies and other risky assets. Sharp drops in crypto values in early 2022 sparked a liquidity crisis that led to the bankruptcy of billion-dollar companies, like the hedge fund Three Arrows Capital or crypto lenders Celsius and Voyager Digital.

What’s in the future of Bitcoin?

Bitcoin will still be among the best-performing financial assets over the long run, even after the 2022 sell-off during thecrypto winter. But if Bitcoin is ever going to be accepted as genuinely global money, its high volatility will remain a barrier. However, no matter what, one thing is sure: the world’s leading cryptocurrency still has a bright future.